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RNS Number : 6142I
Synectics PLC
15 December 2020
FINAL 15 December 2020
Synectics plc
("Synectics" or the "Company" or the "Group")
Post-Close Trading Update
Synectics plc (AIM: SNX), a leader in the design, integration
and support of advanced security and surveillance systems, today
issues a post-close trading update for the financial year ended 30
November 2020.
Trading has continued largely in line with the Board's revised
expectations as set out in the Company's trading update released on
29 September 2020, and u nderlying results for the second half of
the Group's financial year ended 30 November 2020 are now expected
to be broadly similar to those in the first half.
The Covid-19 pandemic, as previously stated during 2020, has
affected activity across all of Synectics' markets, in particular,
the Group's largest market sector, global casinos and gaming. As
reported in the Company's interim results, released on 14 July
2020, disruption to gaming activity across all regions has had a
more prolonged adverse impact on the Group's revenues than customer
projections during the summer had led the Board to expect at that
time. However, trading and forecasts in other market sectors have
continued to be largely in line with the Board's expectations.
Progress on the large and strategically important contract with
Deutsche Bahn for Berlin's S-Bahn has continued to go well. The
project, for a 'next generation' operational management system,
remains on track for its scheduled deployment in early January
2021. To strengthen its growing German business with major public
transport operators, as announced in early December, Synectics'
German office has been relocated to Berlin and Dr Kerstin Wendt has
been appointed as the new regional head. These moves will improve
local client support and contribute to Synectics' ability to
capitalise on market interest in Synergy's evolving capabilities in
major urban transport developments.
While continuing to support customers, invest in technology
development and manage the implications of Covid-19, the Board has
taken the opportunity to review and refine business strategy to
better enable the Group's long-term growth opportunities. The
Group's Systems division has been restructured, coming together
under a single, unified global management organisation that will
improve customer support and reduce the overall cost base of global
operations.
W ork has progressed, as planned, on consolidating the
operations of Synectics' Integration and M anaged S ervices divisio
n, which was completed on 1 December 2020. This consolidation has
included the closure or downsizing of several operating sites, with
a consequent reduction in costs and sharpened focus on specialised
and long-term customers for whom Synectics can provide a valuable
differentiated service. The new combined business, "Synectics
Security", was launched in September 2020 and has been well
received by customers.
The costs of restructuring both the Group's divisions, totalling
approximately GBP2 million, will be reported as non-underlying
items in the Group's audited financial statements for the year to
30 November 2020. Annual cost savings are estimated to be
approximately GBP2.4 million with the benefit being fully realised
in the Company's current financial year, ending 30 November
2021.
The Group's net cash balance as 30 November 2020 was GBP6.9
million (30 November 2019: GBP3.6 million), with additional undrawn
bank facilities of GBP5.0 million. This increased cash balance
results largely from lower working capital needed to support
reduced revenues, a position that will unwind, at least in part, as
revenues recover to more normal levels.
Given the ongoing uncertainty in the timing of market recovery
from Covid-19 impacts, the Board's forecasts and plans continue to
be based on the assumption that demand in affected sectors will
remain weak in the near-term, though clearly more optimistic
scenarios are possible. There has been growing interest in the
areas of development in which Synectics is continuing to invest,
particularly from large government-related urban transport and
critical infrastructure projects.
Synectics' priorities continue to be: to protect the health and
well-being of its employees and customers; to provide ongoing
support to its customers; and to manage the business for the long
term by prudent actions to preserve cash and maintain the employee
skill base essential to develop, sell, deliver and support its core
technology and services .
The Group's audited final results for the year ended 30 November
2020 are expected to be released on or around 2 March 2021.
Paul Webb, Chief Executive of Synectics, commented : "With our
ongoing investment in advanced product development and deep
customer relationships, Synectics is well positioned across our
global markets for long-term success. We remain confident in our
growth prospects as our software and technology capabilities
continue to open up new opportunities in evolving markets for our
security and surveillance technology."
Ends
About Synectics plc
Synectics (AIM: SNX) is a leader in the design, integration and
support of advanced security and surveillance systems that enable
clients around the world to protect their people, communities, and
assets.
Founded over 30 years ago, Synectics has deep industry
experience across gaming, energy, urban transport, public space and
critical infrastructure projects. The group's expert engineering
teams work in partnership with customers to create integrated
product and technology solutions, proven in the most complex and
demanding operating environments.
Find out more at www.synecticsplc.com
For further information, please contact:
Synectics plc Tel: +44 (0) 114 280 2828
Paul Webb, Chief Executive
David Coghlan, Chairman
David Bedford, Finance Director
email: info@synecticsplc.com www.synecticsplc.com
Shore Capital Tel: +44 (0) 20 7408 4050
Tom Griffiths / Henry Willcocks
/ David Coaten
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